Following the most recent Naira devaluation by the Central Bank of Nigeria (CBN), Nigeria’s debt profile has increased to N81 trillion. The Naira component of debt service automatically increased by N9 trillion due to the devaluation.
The cost of repaying external debt would increase when the naira is devalued. When seen in naira terms, Uwaleke continued, the depreciation also raises the opportunity cost of servicing foreign loans in dollars.
By implication, every time foreign debts are serviced in dollars, the nation will lose more naira than it did in the past.
We encouraged members to view this new development as a long-awaited chance to ease the lingering difficulties caused by the forex crisis and expressed our optimism that the floating of the naira will bring back normalcy to Nigeria’s forex market.